NEW YORK (Legal Newsline) - A federal judge in New York has thrown out a lawsuit brought on behalf of the parent company of Ben & Jerry's over the ice cream giant's decision to boycott the market in Israeli-occupied territories.
Plaintiff lawyers couldn't prove Unilever knew about the resolution passed by the board at Ben & Jerry's in July 2020 being implemented. Unilever bought the company for $326 million in 2000, and officers at Unilever were named as individual defendants in a lawsuit filed last year.
Unilever fought the resolution for a year before Ben & Jerry's implemented it in July 2021, then sold Ben & Jerry's business interests in June 2022. The lawsuit alleged misleading statements to potential investors in that year-long delay.
"Accepting as true Plaintiffs contention that the Individual Defendants had 'actual knowledge of the Resolution,' this alone cannot support an inference that they 'knew facts or had access to information suggesting that their public statements were not accurate,'" Judge Lorna Schofield wrote in an Aug. 29 decision granting Unilever's motion to dismiss.
"Plaintiffs' scienter argument rests on the assumption that implementation of the B&J Board's Resolution was a certainty or at least probable, and known by the Individual Defendants to be so, in the year between the Resolution's adoption and its announcement. This assumption is belied by the Complaint."
The complaint shows the B&J board lacked the authority to put the resolution into effect and that on the day that happened, the board and Unilever made conflicting announcements.
Unilever's individual defendants "had no reason to believe that the Resolution would be adopted or implemented in a way that was contrary to Unilever's wishes and accordingly did not act with scienter in delaying disclosure of the Resolution," the decision says.
The suit was brought over a drop in the consumer goods company's stock price. The proposed class action sought to represent everyone who bought a Unilever American Depositary Receipt between Sept. 2, 2020, and July 21, 2021.